EX-10.1






Exhibit 10.1




LEAR CORPORATION

LONG-TERM STOCK INCENTIVE PLAN

MANAGEMENT STOCK PURCHASE PLAN

Restricted Stock Unit Reallocation Program




SUPPLEMENT TO MANAGEMENT STOCK PURCHASE PLAN

TERMS AND CONDITIONS 



This Supplement to Management Stock Purchase Plan Terms and Conditions (the “Supplement”)
constitutes an amendment to:





	 	•	 	the 2006 Management Stock Purchase Plan Terms and Conditions (the “2006
Tranche”);
	 
	 	•	 	the 2007 Management Stock Purchase Plan Terms and Conditions (the “2007
Tranche”); and
	 
	 	•	 	the 2008 Management Stock Purchase Plan Terms and Conditions (the “2008
Tranche”).




This document constitutes the consolidation into a single document of separate supplements, one for
each Tranche, and the Supplement is to be applied separately and independently for each Tranche and
solely with reference to that Tranche. By way of illustration, when the Supplement is applied to
the 2008 Tranche, references to the Participant’s “RSU Account” mean his or her RSU Account in the
2008 Tranche only.





	1.	 	Definitions. The following terms have the meanings set forth below. Any term
capitalized herein but not defined below has the meaning set forth in the Lear Corporation
Long-Term Stock Incentive Plan (the “Plan”).






	 	(a)	 	“Deferral Election Amount” means the amount of bonus and salary covered
by a Participant’s deferral election.
	 
	 	(b)	 	“Deferred Cash” means an amount credited to a Participant’s Deferred
Cash Account.
	 
	 	(c)	 	“Deferred Cash Account” means the bookkeeping account to which Deferred
Cash is credited.
	 
	 	(d)	 	“Deferred Cash Election Percentage” means the percentage (0%, 25%, or
50%) of the RSU Account that the Participant elects to convert into Deferred Cash
pursuant to a Reallocation Election.
	 
	 	(e)	 	“Earned Portion” of the Deferred Cash Account of a Participant who
separates from service during 2008 means:






	 	(i)	 	for the 2006 and 2007 Tranches, 100% of the Deferred Cash
Account; and
	 
	 	(ii)	 	for the 2008 Tranche, the Deferred Cash Account balance
multiplied by Paid-Up Ratio.




 









 












	 	(f)	 	“Paid-Up Amount” of a Participant who separates from service during
2008 means the cumulative amount actually withheld to date from the Participant’s bonus
and salary pursuant to the Participant’s Deferral Election. (This term is used for the
2008 Tranche only.)
	 
	 	(g)	 	“Paid-Up Ratio” of a Participant who separates from service during 2008
means the ratio of the Paid-Up Amount to the Deferral Election Amount. (This term is
used for the 2008 Tranche only.)
	 
	 	(h)	 	“Reallocation Date” means [first business day after expiration of the
offer to exchange].
	 
	 	(i)	 	“Reallocation Date Account Value” means the Reallocation Date RSU
Balance multiplied by the Reallocation Date Share Value.
	 
	 	(j)	 	“Reallocation Date RSU Balance” means the Restricted Stock Units
credited to the Participant’s Account as of the Reallocation Date (immediately prior to
any reallocation).
	 
	 	(k)	 	“Reallocation Date Share Value” means the Fair Market Value of a Share
on the Reallocation Date.
	 
	 	(l)	 	“Reallocation Election” means an election pursuant to Section 2 to
convert a portion of the RSU Account into Deferred Cash and/or a SAR.
	 
	 	(m)	 	“Reallocation Period” means the period beginning [commencement date of
offer to exchange] and ending [expiration date of offer to exchange].
	 
	 	(n)	 	“RSU Account” means Restricted Stock Units credited to the Participant
immediately prior to the Reallocation Date.
	 
	 	(o)	 	“SAR” means a Stock Appreciation Right having the terms and conditions
set forth in Exhibit A hereto.
	 
	 	(p)	 	“SAR Election Percentage” means the percentage (0%, 25%, or 50%) of the
RSU Account that the Participant elects to convert into a SAR pursuant to a
Reallocation Election.
	 
	 	(q)	 	“Term Date” means:






	 	(i)	 	March 14, 2009 for the 2006 Tranche;
	 
	 	(ii)	 	March 14, 2010 for the 2007 Tranche; and
	 
	 	(iii)	 	March 14, 2011 for the 2008 Tranche.






	 	(r)	 	“Tranche” or “MSPP” means the 2006 Tranche, the 2007 Tranche,
or the 2008 Tranche.




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	2.	 	Reallocation Election






	 	(a)	 	Election. At his or her option, a Participant may irrevocably elect
during the Reallocation Period to reallocate, in 25% increments, up to 50% of his or
her RSU Account into Deferred Cash or a SAR.
	 
	 	(b)	 	Reallocation to Deferred Cash. Effective as of the Reallocation Date
(i) there shall be debited from the Participant’s RSU Account the Deferred Cash
Election Percentage of the Reallocation Date RSU Balance and (ii) there shall be
credited to the Participant’s Deferred Cash Account the Deferred Cash Election
Percentage of the Reallocation Date Account Value.
	 
	 	(c)	 	Reallocation to SAR. Effective as of the Reallocation Date (i) there
shall be debited from the Participant’s RSU Account the SAR Election Percentage of the
Reallocation Date RSU Balance, (ii) there shall be granted to the Participant a SAR
covering a number of Shares equal to the SAR Election Percentage of the Reallocation
Date Account Value multiplied by the SAR conversion ratio disclosed in the offering.
	 
	 	(d)	 	Effect on Restricted Stock Units. A Reallocation Election shall have
no effect on the rights of the Participant with respect to the Restricted Stock Units
remaining in his or her Account after the reallocation, or on the rights of a
Participant who does not make a Reallocation Election.






	3.	 	SAR. The terms of a Participant’s SAR are set forth in Exhibit A hereto.
	 
	4.	 	Interest Credits to Deferred Cash Account. Interest, compounded monthly, shall be
credited to the Participant’s Deferred Cash Account from the Reallocation Date until payment
of such account to the Participant. The rate of such interest shall be the average of the
10-year Treasury note rates, as reported by the Midwest edition of The Wall Street Journal, as
of the first business day of each of the four calendar quarters preceding the year for which
the interest is credited.
	 
	5.	 	Deferred Cash Payout.






	 	(a)	 	Timing. A Participant shall receive a distribution in cash with
respect to his or her Deferred Cash Account within 10 days of the earliest to occur of
(i) the Participant’s termination of employment, (ii)the Term Date, or (iii) a Change
in Control.
	 
	 	(b)	 	Amount.






	 	(i)	 	During 2008. If the Participant’s termination of
employment occurs during 2008, he or she shall be paid in cash within 10 days
after such termination the Earned Portion of his or her Deferred Cash Account.




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	 	(ii)	 	After 2008. If the Participant’s termination of
employment occurs after 2008, he or she shall be paid in cash within 10 days
after such termination the entire balance in his or her Deferred Cash Account.




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Exhibit A




LEAR CORPORATION

LONG-TERM STOCK INCENTIVE PLAN

MANAGEMENT STOCK PURCHASE PLAN

Restricted Stock Unit Reallocation Program




SAR Terms and Conditions





	1.	 	Definitions. The following terms have the meaning set forth below. Any term
capitalized herein but not defined below has the meaning set forth in the applicable
Management Stock Purchase Plan Terms and Conditions, as amended by the Supplement thereto (the
“MSPP”) or, to the extent not defined in the MSPP, the Lear Corporation Long-Term
Stock Incentive Plan (the “Plan”).






	 	(a)	 	“Accelerated Vesting Date” means the date prior to the Scheduled
Vesting Date that is the later of (i) the end of the first 10-consecutive trading day
period beginning after the Grant Date throughout which the Fair Market Value of a Share
has equaled or exceeded 150% of the Grant Price, or (ii) the six-month anniversary of
the Grant Date.
	 
	 	(b)	 	“Earned Portion” of the SAR Shares of a Participant who separates from
service during 2008 means the number of SAR Shares multiplied by Paid-Up Ratio.
	 
	 	(c)	 	“Grant Date” means the Reallocation Date.
	 
	 	(d)	 	“Grant Price” means the Fair Market Value of a Share on the Grant Date.
	 
	 	(e)	 	“SAR Shares” means the Shares that are subject to the SAR.
	 
	 	(f)	 	“Scheduled Vesting Date” means:






	 	(i)	 	March 14, 2009 for the 2006 Tranche;
	 
	 	(ii)	 	March 14, 2010 for the 2007 Tranche; and
	 
	 	(iii)	 	March 14, 2011 for the 2008 Tranche.






	 	(g)	 	“Vesting Date” means the earlier of the Scheduled Vesting Date or the
Accelerated Vesting Date.




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	2.	 	SAR Term. The term of the SAR (the “Term”) shall be the period commencing on
the Grant Date and ending on the second anniversary of the Scheduled Vesting Date.
	 
	3.	 	Vesting and Exercisability.






	 	(a)	 	Full Vesting. If the Participant remains continuously employed by the
Company between the Grant Date and the Vesting Date, the SAR shall become fully vested
on the Vesting Date.
	 
	 	(b)	 	Exercisability. To the extent vested, the SAR may be exercised in
whole or in part at any time during the Term, except as otherwise provided in Sections
4, 5, and 6.
	 
	 	(c)	 	Forfeitures. The portion of a SAR that fails to vest or ceases to be
exercisable shall be forfeited.






	4.	 	Death, End of Service, Disability, or Involuntary Termination Without Cause.






	 	(a)	 	During 2008. If the Participant ceases to be an employee during 2008
by reason of death, End of Service, Disability, or involuntary termination by the
Company without Cause, the SAR shall vest with respect to the Earned Portion of his or
her SAR Shares, and the SAR shall be exercisable with respect to such portion
throughout the two-year period beginning on the termination date.
	 
	 	(b)	 	After 2008 and Before Vesting Date. If the Participant ceases to be an
employee after December 31, 2008 and before the Vesting Date by reason of death, End of
Service, Disability, or involuntary termination by the Company without Cause, the SAR
shall become fully vested and shall be exercisable for the two-year period commencing
on the Participant’s termination date (but not beyond the end of the Term).
	 
	 	(c)	 	On or After Vesting Date. If the Participant ceases to be an employee
on or after the Vesting Date by reason of death, End of Service, Disability, or
involuntary termination by the Company without Cause, the SAR shall become fully vested
and shall be exercisable throughout the remainder of the Term.






	5.	 	Voluntary Resignation.






	 	(a)	 	During 2008. If the Participant ceases to be an employee during 2008
by reason of his or her voluntary resignation (other than an End of Service), the SAR
shall become exercisable at such time on a Limited Basis with respect to 75% of the
Earned Portion of the SAR Shares and shall remain exercisable on a Limited Basis
through December 31, 2008. For purposes of this Section 5(a), “Limited Basis”
means that the total amount payable with respect to the exercise of the SAR shall in no
event exceed the SAR Election Percentage of the Paid-Up Amount.




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	 	(b)	 	After 2008 and Before Vesting Date. If the Participant ceases to be an
employee after December 31, 2008 and before the Vesting Date by reason of his or her
voluntary resignation, the SAR shall become exercisable at such time on a Limited Basis
with respect to 75% of the Earned Portion of the SAR Shares and shall remain
exercisable on a Limited Basis for the three-month period commencing on the
Participant’s termination date. For purposes of this Section 5(b), “Limited
Basis” means that the total amount payable with respect to the exercise of the SAR
shall in no event exceed the SAR Election Percentage of the Deferral Election Amount.
	 
	 	(c)	 	On or After Accelerated Vesting Date and Prior to Scheduled Vesting
Date. If the Participant ceases to be an Employee on or after the Accelerated
Vesting Date and Prior to the Scheduled Vesting Date by reason of his or her voluntary
resignation, the SAR shall remain fully exercisable throughout the three-month period
beginning on the termination date.
	 
	 	(d)	 	On or After Scheduled Vesting Date. If the Participant ceases to be an
Employee on or after the Scheduled Vesting Date by reason of his or her voluntary
resignation, the SAR shall remain fully exercisable throughout the remainder of the
Term.






	6.	 	Termination for Cause.






	 	(a)	 	During 2008. If the Participant’s employment is terminated for Cause
during 2008, the SAR shall become exercisable at such time on a Limited Basis with
respect to 75% of the Earned Portion of the SAR Shares and shall remain exercisable on
a Limited Basis through December 31, 2008. For purposes of this Section 6(a),
“Limited Basis” means that the total amount payable with respect to the
exercise of the SAR shall in no event exceed the SAR Election Percentage of the Paid-Up
Amount.
	 
	 	(b)	 	After 2008 and Before Vesting Date. If the Participant’s employment is
terminated for Cause after December 31, 2008 and before the Vesting Date, the SAR shall
become exercisable at such time on a Limited Basis with respect to 75% of the Earned
Portion of the SAR Shares and shall remain exercisable on a Limited Basis for the
three-month period commencing on the Participant’s termination date. For purposes of
this Section 6(b), “Limited Basis” means that the total amount payable with
respect to the exercise of the SAR shall in no event exceed the SAR Election Percentage
of the Deferral Election Amount.
	 
	 	(c)	 	On or After Vesting Date. If the Participant’s employment is
terminated for Cause on or after the Vesting Date, the SAR shall remain fully
exercisable throughout the three-month period beginning on the termination date.






	7.	 	Change in Control. Notwithstanding anything to the contrary herein, in the event of
a Change in Control occurring before the Scheduled Vesting Date, the SAR of a Participant who
was employed by the Company immediately before the Change in Control shall be




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	 	 	fully vested and exercisable upon the Change in Control and shall remain exercisable
throughout the remainder of the Term.






	8.	 	Exercise of SAR.






	 	(a)	 	To the extent vested and exercisable, the SAR may be exercised in whole at any
time or in part from time to time as to any or all full Shares under the SAR by written
notice to the Company indicating the number of SAR Shares as to which the SAR is being
exercised. Notwithstanding the foregoing, the SAR may not be exercised for fewer than
100 Shares at any one time or, if fewer, all the Shares that are then subject to the
SAR, to the extent vested.
	 
	 	(b)	 	Any amount due to the Participant upon exercise of the SAR shall be paid in
cash and shall be based on the amount, if any, by which the Fair Market Value of a
Share on the date of exercise exceeds the Grant Price (except as provided in Sections 5
and 6 in circumstances where the SAR is exercisable only on a Limited Basis). The
Participant shall not receive a distribution if the Fair Market Value of a Share on the
date of exercise does not exceed the Grant Price. The Participant’s distribution of
cash upon exercise of the SAR shall be the aggregate dollar difference between the Fair
Market Value of a Share on the date of exercise and the Grant Price for all Shares with
respect to which the SAR is so exercised (except as provided in Sections 5 and 6 in
circumstances where the SAR is exercisable only on a Limited Basis); provided that the
amount delivered to Participant shall be subject to applicable withholding taxes.






	9.	 	Transferability of SAR. This SAR is transferable only by will or the laws of descent
and distribution, or pursuant to a domestic relations order (as defined in Code Section
414(p)). The SAR shall be exercisable during the Participant’s lifetime only by the
Participant or by his or her guardian or legal representative. The Committee may, in its
discretion, require a guardian or legal representative to supply it with evidence the
Committee deems necessary to establish the authority of the guardian or legal representative
to exercise the SAR on behalf of the Participant.
	 
	10.	 	Securities Law Requirements.






	 	(a)	 	This SAR shall not be exercisable in whole or in part, if exercise may, in the
opinion of counsel for the Company, violate the 1933 Act (or other federal or state
statutes having similar requirements), as it may be in effect at that time, or cause
the Company to violate the terms of Section 4.1 of the Plan.
	 
	 	(b)	 	The SAR is subject to the further requirement that if at any time the Committee
determines in its discretion that the registration, listing or qualification of the
Shares subject to the SAR under any federal securities law, securities exchange
requirements or under any other applicable law, or the consent or approval of any
governmental regulatory body, is necessary as a condition of, or in connection with,
the granting of the SAR, the SAR may not be exercised in whole or in part,




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	 	 	 	unless the necessary registration, listing, qualification, consent or approval has
been effected or obtained free of any conditions not acceptable to the Committee.
	 
	 	(c)	 	With respect to individuals subject to Section 16 of the Exchange Act,
transactions under this SAR are intended to comply with all applicable conditions of
Rule 16b-3, or its successors under the Exchange Act. To the extent any provision of
the SAR or action by the Committee fails to so comply, the Committee may determine, to
the extent permitted by law, that the provision or action shall be null and void.






	11.	 	No Obligation to Exercise SAR. The granting of the SAR imposes no obligation upon
the Participant (or upon a transferee of an Participant) to exercise the SAR.
	 
	12.	 	No Limitation on Rights of the Company. The grant of the SAR shall not in any way
affect the right or power of the Company to make adjustments, reclassification or changes in
its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or
transfer all or any part of its business or assets.
	 
	13.	 	Plan and SAR Not a Contract of Employment. Neither the Plan nor this SAR is a
contract of employment, and no terms of employment of the Participant shall be affected in any
way by the Plan, this SAR or related instruments except as specifically provided therein.
Neither the establishment of the Plan nor this SAR shall be construed as conferring any legal
rights upon the Participant for a continuation of employment, nor shall it interfere with the
right of the Company or any Affiliate to discharge the Participant and to treat him or her
without regard to the effect that treatment might have upon him or her as an Participant.
	 
	14.	 	Participant to Have No Rights as a Stockholder. The Participant shall have no rights
as a stockholder with respect to any Shares subject to the SAR.
	 
	15.	 	No Deferral Rights. Notwithstanding anything in Article 12 of the Plan to the
contrary, there shall be no deferral of payment, delivery or receipt of any amounts hereunder.
	 
	16.	 	Additional Payment in Limited Circumstances. This paragraph applies solely to a
Participant (an “Applicable Participant”) whose employment terminates on or before
December 31, 2008 for any reason other than (i) a voluntary termination that is neither (x) an
End of Service nor (y) a termination for “good reason” as defined in the Participant’s
employment agreement; or (ii) a termination by the Company without Cause. In the event that
any payment made after December 31, 2008 to an Applicable Participant pursuant to such
Participant’s exercise of the SAR (the “Post-2008 SAR Exercise Proceeds”) is
determined to be subject to the interest and tax imposed by Code Section 409A(a)(1)(B) or any
interest or penalties with respect to such tax (collectively, the “Section 409A Tax”),
the Company shall pay the Participant, within 30 days after the Section 409A Tax is paid, an
additional amount (the “Section 409A Gross-Up Payment”) such that the net amount the
Participant retains, after paying the Section 409A Tax and any federal, state or local income
or other applicable taxes with respect to the Section 409A Gross-Up Payment, is equal to the
amount the Participant would have




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	 	 	received if the Section 409A Tax had not applied to the Post-2008 SAR Exercise Proceeds. For
purposes of determining the amount of the Section 409A Gross-Up Payment, if any, the
Participant shall be deemed to pay Federal income tax at the highest marginal rate of
Federal income taxation in the calendar year in which the Post-2008 SAR Exercise Proceeds
are paid, and applicable state and local income taxes at the highest marginal rate of
taxation on the date the Post-2008 SAR Exercise Proceeds are paid, net of the maximum
reduction in Federal income taxes that could be obtained from deduction of such state and
local taxes. The Participant and the Applicable Participant shall reasonably cooperate with
each other in connection with any administrative or judicial proceedings concerning the
existence or amount of liability for Section 409A Tax with respect to the Payments and the
Participant shall, if reasonably requested by the Company, contest any obligation to pay a
Section 409A Tax. If, as a result thereof, the Participant receives a tax refund or credit
for any Section 409A Tax previously paid with respect to the Post-2008 SAR Exercise
Proceeds, the Participant shall return to the Company an amount equal to such refund or
credit.
	 
	17.	 	Notice. Any notice or other communication required or permitted hereunder must be in
writing and must be delivered personally, or sent by certified, registered or express mail,
postage prepaid. Any such notice shall be deemed given when so delivered personally or, if
mailed, three days after the date of deposit in the United States mail, in the case of the
Company to 21557 Telegraph Road, P. O. Box 5008, Southfield, Michigan, 48086-5008, Attention:
General Counsel and, in the case of the Participant, to the last known address of the
Participant in the Company’s records.
	 
	18.	 	Governing Law. This document and the SAR shall be construed and enforced in
accordance with, and governed by, the laws of the State of Delaware, determined without regard
to its conflict of law rules.
	 
	19.	 	Plan Documents Control. The rights granted under this SAR document are in all
respects subject to the provisions of the MSPP and the Plan to the same extent and with the
same effect as if they were set forth fully herein. If the terms of this document or the SAR
conflict with the terms of the MSPP or the Plan document, the terms of the MSPP and the Plan
document shall control.






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